Points of difference - resonating focus

Let’s stop and ask a short question, where should your company to be in five years?

Here’s an answer:

- You should have the best product for your target segments.
- By providing the best product you should have a reasonable payback on the superior value your products are providing. 

It’s essential that your product delivers the best value and most likely that doesn't mean it's the cheapest one. It means that your price must be the most favorable one relative the costs you can save and the increased income you can provide.

In order to reach this you need to have an understanding of the value you’re providing. What are the value elements and what is our differentiation towards your competitors?

What you need to find is the resonating focus. You need to understand the differentiation between your product and the other products on the market.

Points of difference

If we ask the product managers about points of difference there will be a long list. That’s really not what we need. What we need is a short list with valuable differences that are easy to understand. 

The problem here is that the value is dependent on what segment you are selling to. For one segments some product features are valuable and for another segment a complete different set of features are providing the value. That means that we first have to figure out what segments we’re approaching. The next questions is what creates value within each of these segments? 

There’s a big difference between value and traditional pricing. To figure out the price is fairly easy, because price is the same for everybody. Value on the other hand is different for every customer and to be able to solve this we need segmentation in order to manage the necessary simplification. 

That’s why segmentation is one of the first steps in any value selling project. If we don’t understand what differentiates the customers we will never be able to understand how the perceived value differs to our customers.

So, segmentation is the first question we need to understand in order to figure out where the company should be in five years. So the first question we should be able to answer is this:

How can we optimize the value for each segment and what should be prioritized in product development in order to reach that goal?